Farmer gets prison, $9 million repayment order in Kentucky crop insurance fraud [Lexington Herald-Leader]

A farmer who defrauded the government of $3.5 million by getting crop insurance in the names of other people has been sentenced to three years and six months in prison.

The sentence for David G. Manion, 61, included $3.5 million in restitution to the federal crop insurance program.

Manion also agreed to make an additional payment to the government of nearly $5.5 million to resolve other disputed payments, according to a court document.

In addition, Manion is under a lifetime ban on taking part in federal crop insurance, and several family members agreed to a seven-year ban.

Manion is a resident of Lafayette, Tenn., just south of the Kentucky line, but farmed in both states and was charged in federal court in Kentucky.

In 2016, as federal prosecutors considered charging him over alleged fraud in insurance claims between 2009 and 2012, Manion agreed to a deal that required him to be barred from getting federal crop insurance for five years.

Prosecutors later charged him with filing insurance claims that inflated the amount of damage to his tobacco crops in Warren, Allen and Simpson counties in Kentucky, resulting in a loss of $1.1 million to the U.S. Department of Agriculture.

Manion pleaded guilty in August 2016 and was sentenced him to one day behind bars, according to a sentencing memorandum by Assistant U.S. Attorney David Weiser.

Federal authorities later learned that months earlier, in February 2016, even as he was negotiating a ban on getting crop insurance in his name, Manion began having family members take out insurance in their names to cover tobacco crops that belonged to him, the prosecutor said.

That resulted in a loss of $3.5 million to the federal crop insurance program between 2016 and 2022, federal authorities said.

Federal prosecutors charged him last November in the latest case.

Manion’s attorney, Kyle G. Bumgarner, sought a non-custodial sentence for Manion, such as home detention, citing his serious health problems that include diabetes and heart disease.

Any time in prison will cause a decline in Manion’s condition and could lead to this death, Bumgarner wrote in a sentencing memo.

Bumgarner also pointed out that Manion and family members have mortgaged farmland to come up with the $8,998,023 Manion committed to paying the government at or before his sentencing.

“Taking out a loan to repay $9 million may ultimately result in the Manions losing everything they have ever earned,” Bumgarner said. “That is the risk they have taken on to make things right with the government.”

However, Chief U.S. District Judge Greg N. Stivers, who gave Manion a sentence in 2016 well below the advisory minimum, sentenced him to five months more than the prosecution sought in the latest case.

Federal authorities have prosecuted a number of Kentucky farmers, as well as some insurance adjusters and tobacco warehouse officials, over what one prosecutor called a “staggering” level of fraud in crop insurance.

In one case, an insurance agent and adjuster in Mount Sterling, Michael McNew, caused a loss of $23.6 million by facilitating false crop-insurance claims involving Central Kentucky farmers, prosecutors said.

In 2021, a judge sentenced McNew to seven years in prison.

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